State insurance rates will increase in 2017

By Kevin Zimmerman

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Health insurance rates next year for plans both on and off the Access Health CT exchange will increase significantly – though in some cases, not as high as had been expected, according to the Connecticut Insurance Department (CID).

Announced on Sept. 2, the CID rulings were made on 17 rate filings from 12 companies selling individual and small group plans that cover approximately 300,000 people in Connecticut.

The overall average rate increases for 2017 are 24.8 percent for individual products and 12.9 percent for small group insurance. For plans offered on Access Health CT, Anthem’s requested rate hike, averaging 26.8 percent, was disapproved with recalculation required, while ConnectiCare’s revised requested increase of 27.1 percent was reduced to 17.4 percent. The deadline for resubmitted calculations is Sept. 7.

In addition to rising medical costs, the rates reflect the impact of the elimination of federal payments to insurers as part of a program to stabilize premiums in the first three years of the Affordable Care Act (ACA), also known as Obamacare. Insurers received funds to off-set costs from the expected high-cost claims of the newly insured.

“The department conducted thorough actuarial reviews on each rate request and, as in years past, was able to reduce some of the proposed increases,” said CID Commissioner Katharine L. Wade. “However, the Connecticut market is experiencing what other states have seen this year — rising health care costs, increased demand for services and significantly higher prescription drug costs. Therefore, in some cases higher rates were actuarially justified.

“Under the ACA more people are covered and more are using their insurance,” she continued. “That increased demand for services, sunset of the federal reinsurance program and volatility in the ACA’s risk adjustment program have had a major impact on rates for next year.”

A chart of the changes can be seen here.

“We understand that these rates will have an impact on consumers and their household budgets,” Wade said, “and we need to continue to look for ways to address costs while focusing on quality and access. We view this as an opportunity to examine benefit design and encourage the use of networks that will achieve cost savings.

“Consumers need choices – abundant choices – of plans that are ACA compliant,” she added. “The Department will continue to work with the Governor’s office, our federal partners, Access Health CT, carriers, advocates and others to ensure that consumers have access to quality health care and more choice of plans.”

In a letter to U.S. Health and Human Services Department, Gov. Dannel Malloy wrote: “I am very concerned and disappointed that these rate increases must occur. While I recognize that they are the reality, it is imperative that further action is taken at the federal level to stabilize rates.”

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